Global Trade This Week – February 27th, 2023
What’s going on in Global Trade this Week? Today Doug Draper of Inland Star Distribution and Trade Geek Pete Mento of Mento LLC cover:
3:52 -BP Acquires TA Truck Stops
10:50 -OECD Numbers for Q4 on Trade & Services
16:34 -Halftime
21:25 -Buffett's Latest Letter to Shareholders
32:57 -Trade War Impacts - Was It Worth It?
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Keenan Brugh 0:00
You're watching Global Trade This Week with Pete Mento and Doug Draper.
Pete Mento 0:09
I'm just going to assume that it's global trade this week because our counter went to five and stopped everybody. This is how sad I am. I'm almost like Ron, Jeremy, which was was it? Ron Burgundy? Ron Burgundy, Ron Burgundy. You can say, Yeah, I use a 4321 and then go. That's how pathetic I am. But it's another classic episode. I'm going to call this epic episode. Just 60 seconds in Doug. That's how good this episode is going to be a global trade this week. I peed my toe. And I'm calling myself typhoid. Larry this week, what do you guys don't get the benefit of is the platform that we record this on? asked us for name, Doug, because he is the straight man of the two of us. Always just says Doug Draper. Every week I come up with a new name. This week. I'm tough with it because I am still sick everyone. After a week, and then would be of course is Doug Draper. The the wind beneath my wings. Yep. You are?
Doug Draper 1:16
Yeah. New Times Roman is this is the font that I use, because that's the most basic font that's out there. So yeah, I am always Doug Draper. And you are always something to behold with whatever name you come up with. I don't think that our listeners can see that.
Pete Mento 1:34
So they can't. But do you? Do you sort of when you get a little too much ketchup on your french fries yet to do one of these? Because it's a little too spicy?
Doug Draper 1:43
No, no, I'm, I'm a Spice guy. So
Pete Mento 1:47
whenever I hear someone say that, then I take him to like an Indian restaurant. And you can watch them about like, you could literally watch them come close to crapping their pants while they're having the first course. So are we are we that kind of I like spice or we the Oh, I just love a little hot sauce on everything kind of I like spice. No, I
Doug Draper 2:08
yeah, I don't know if I'm Thai Spice. You know what, here? Indian, Indian now. I don't I don't eat it enough to have any baseline comparison. So it was up in Steamboat a couple It was last summer. And I don't know what I was thinking. They brought up some wasabi and I thought it was like yogurt or like apple butter or something. And I just laid that thing on. And I thought I was literally going to die. I had to go outside. And it was i i was panicked. Not only was it spicy, but my body was shutting down. And I was like, Oh my God, this could be. I mean, a lot of that
Pete Mento 2:51
sounds great when you have like a sinus congestion. It definitely opens everything up. Sounds great. Yeah, I'm a big fan of Indian Indian food since I was you know, at Biddy. And I always. I do have friends in India that do watch the show dog. And they will tell you they will tell you that. I definitely. I definitely fight the fight force there there. There are just things that I cannot keep up with. But I definitely fight the fight force. I try really hard. But yeah, yeah, well, anyway, as I stated, I think this is going to be an instant classic. Maybe Keenan could do some graphics, you know, instant classic of global trade this week brought to you by our good friends at CAP logistics. And you have the great honor of giving us our first topic this week. So
Doug Draper 3:40
well, the pressure is on for sure. With EPIC Benefits the capital E or just underscore the whole word. Well, I don't know why.
Pete Mento 3:48
It's so epic. Doug, we can just go lowercase. Honestly,
Doug Draper 3:51
there you go. I like it. I like it. Well, the first topic on this epic episode is happened about a week and a half ago, British Petroleum BP decided to purchase ta truckstops. Kind of at least, you know, I like to think I'm somewhat in the know of our industry and logistics. I had not even heard this was on the radar on any level, and then start thinking about like, why would they do that my initial take Pete was alright, they're gonna push more gas through their system and really go from there. But I was 100%. Wrong. This is absolutely a renewable play. And the reason that is and I think it's kind of cool. And I gave you a hard time or kind of these crazy analogies you come up with, but here's what I'm going to do really, really quick, right? But I've always talked about you in life need to focus on the 50 feet ahead of you versus the 15 feet in front of you. And I learned that from some guys I went mountain biking with because they were always faster than I was and they watched me climb up this hill. And they realized that my gaze was right in front of me, not ahead of me. And that's what BP is doing on this. One is they're really understanding the impact in the past. Our of the renewables that is not going away, and it's going to continue to be prevalent. So here's the three takeaways on this one, Pete. Number one. All that being said, this is somewhat of a real estate play, right, they are getting infrastructure through the purchase, or through the, the waving of a pen, to have some infrastructure built in the network across the United States. So they can then add changing stations and other types of services that are related primarily to the commercial aspect of electrification and supply chain. So it's going to be a hell of a lot easier to come in and kind of retrofit, if you will, existing infrastructure versus trying to go in there and build from scratch. So this, in my opinion, is somewhat of a real estate play. The other thing, Pete, that we've talked about is if it is another example of owning the rails, right? If you're vertically integrated, you have more control. And I think that we saw that as a trend, during the COVID, supply chain disruptions were relying on others may not be the best play in that moment. And I think the trend is continuing. So it's a vertical integration going from essentially, you know, going from whenever they did pull the oil out of or the the oil out of the ground to refining it, to take it all the way down to the consumer. And then they can also control that supply chain, and additional fuel alternatives, whether that is biodiesel, and other things, excuse me, just beyond the electrification. So it's controlling the vertical supply chain control gives you more power and flexibility. And the last thing is kind of related to all the credits and the carbon offsets that are out there. That essentially, if you think about it, and I may not be explain this the best way, but they control it, like I said, from the time it comes out of the ground, and the time that it gets put in the truck, and there's so many incentives along the way. If you are refining, transporting, engaging in using fuel that is, you know, alternative and, and less impactful to, to the environment. There's credits and offsets and abilities to buy, sell and trade, that they're putting themselves in a position so not having to drop huge amounts of money because they consumed more than they offset. So we're talking about a real estate play, we're talking about vertical vertical integration, and then the carbon offsets and that whole trend of what's going on. I think it's beautiful. And they looked 50 feet ahead of them, not 15 feet in front of them. I'm a big fan of this one big fan.
Pete Mento 7:46
Yeah, there's that great Wayne Gretzky quote, right. Don't go where the puck is go where the pucks going to be. And this is this is, this is like the three level chess bit, you know, you've got a bunch of levels here. So the first is with BPS former major investment in Siberia, where they were deep drilling, deep exploring, they were deep extracting, and deep distributing oil out of a part of Russia that mean, there's a reason why they Saudi and everybody there, right? It's pretty remote and desolate. Well, they're not anymore. So they're they're precluded from transacting business in that part of Russia, because of the deep sanctions that are currently going on there frees up a lot of money. Not to mention the fact that they've had record profits now for gosh, knows how long they've been one of the leaders in trying to find ways to convert their business to renewables. That all makes sense in what you were saying, you know, that, that, that movements towards trying to find new ways to make money, it reminds me of, you know, this this GM executive, when, when people said, Why are we getting into financing? That's a that's a bank thing. And he said, because we can sell them the car twice. Like, what are you talking about? He said, because some of these people, they're gonna pay as much in financing as they're going to pay for the car. So why would we want to get involved in this, we're going to sell them the car twice. This is a way for them to continue to make money on selling diesel fuels on selling their gasoline their products, while also slowly converting into getting people used to the idea of going to British Petroleum of going to BP to buy electrical services swap outs. When that when that is eventually the case. I think it's a brilliant idea, like you said, and then also, I'm going to borrow Doug Draper ism. It's the rails. It's the rails, it's the connectors. It's the it's that that deeper, meaningful part of the business, that Carnegie Rockefeller that these guys taught Americans where they became the robber barons, when you can control the entire supply chain, from raw materials that come out of the ground, all the way to when it's actually consumed. You are indefatigable, you are undefeatable as a business. So if you're able to start from the point where they're mining, they're developing the product, they're delivering the product, they're making it available to someone, recycling it, and all of that going all the way back to the chain. They're setting themselves up to do that. And I think that really is, like you said, it's being forward thinking. It's a great investment. And I've got a feeling they're not going to be the only company who decides to do that.
Doug Draper 10:42
Excuse me? Yeah, I think it's perfect. I think we're on the same page there. All right, epic, episode number two.
Pete Mento 10:50
So here's a acronym that people hear all the time and probably don't understand. And that's the OECD. The OECD stands for the Organisation for Economic Cooperation and Development. The OECD is sort of like a NATO of economics in the OECD, is constantly cooperating in two key ways. The first is suggesting developments of policy in order to get different countries to align focus guide and direct their country's economies towards the betterment of global society. That's it. I mean, it's a pretty big, almost Star Trek kind of idea, right? The peace to the whole world kind of a thing. And the second thing they do is they swap statistics, which honestly, is a whole lot more useful in the short term. I don't know if a bunch of countries are able to really bring world peace about through economies in the short term. But boy, are they great at swapping statistics, and the latest OECD statistics really had a lot more gloom and doom than usual. OECD statistics are unlike any other kinds of statistics, and that they're not scrubbed for any political purpose. So for the most part, Doug, whenever I get like the US Real Estate Report, or the unemployment report, or even our export analysis, I'm always looking for how somebody screwed around with it. But with OECD import and export numbers, they're homogenous. These are, these are raw numbers. And they are what they are man. And unfortunately, the q4 22 numbers were crappy Crap, crap. They were not good man. So just about every country in the world, came back with both negative import and negative export numbers drastically. So compared not only to the year before, but compared to global economic estimates. So not only were they worse than the year before, which was to be expected. But they were worse, compared to the estimates that most economists believe that they would be with one exception. And that was the United States, which had an increase in both the exports and the total value of services, as well as an increase based against the estimates. So who cares? Well, we all care. And the reason for that is because America is still an economy that's very much so based on services. And compared to the rest of the world, that means that our services sector is still relatively strong. So that's a good indicator. It's also a problem. Because for all the doom and gloom errs, like me that say the recession is coming Moodle, this actually, it kind of sticks a finger in the eye of people who are so pretty damn sure the recession is coming. This this may be an indicator that a pretty nasty recession is not as likely as either no recession at all, or a very light recession. So these are fascinating numbers that nobody seems to be talking about. Because I watch the news. Watch it a lot. I read the news, too. These numbers are four days old. And I think we're the only people on the internet physically talking about them.
Doug Draper 14:17
Yeah, I think there were only one talking about it. Yeah. Because they are so cumbersome. You have to have some, some knowledge, some depth to get in there and really understand what they are. They're not.
Pete Mento 14:29
You think you're calling me a nerd right now?
Doug Draper 14:34
Yeah, well, I'll be the straight man. You can be the dork on this one. This is an epic episode, by the way. So it should be good. Yeah. Yeah, my only take on that one. Pete is you nailed it, in the sense that European Union to the same degree, but Americans just consume, consume consume and what they've been consuming is services, right? We've talked about from from From during the COVID is that the whole thing is goods and services and goods were gobbled up during COVID when everybody was inside and we always use the peloton as the example. And then it switched over to services when when people could finally get out of the out into the world and enjoy the experience economy, and I think that's just kind of what you're seeing, seeing there on the trailing information. There's not as many experiences going on and some of the other very large company India, China, things of that nature. So I think that's a telltale sign. how that relates. Pete The thing about this show is that we're very honest with each other thing about is that an indicator of a recession. I don't have any really comments on that. I'm not that nerdy. And I usually just like my hot sauce, like medium hot. So that's kind of how I'll leave with that one.
Pete Mento 15:52
Fair enough, Doug, I guess what, and by the way, I love my peloton. I've got my peloton, treadmill about a month ago, I absolutely adore it. It's it's incredible. Whole family uses it. And that's such a big fan of these really excitable teachers though. Come on, you can do it. No, I can't. I'm very tired.
Doug Draper 16:16
The Bellwether Pete will be when you do your calls and laundry how many of those are hanging on the end of the peloton treadmill? So we'll just that'll be the gauge factor over the next couple of months?
Pete Mento 16:27
None. None. I really enjoy it thoroughly enjoyed it. Alright, so that brings us to to halftime, Doug, you take a halftime this week.
Doug Draper 16:37
Yeah, yeah, of course, it's brought to us by CAP logistics. They're the ones that are pushing the buttons and making this thing happen and give us the platform to say what we want and give the audience our personal opinions on things. So thank you cap logistics, please visit cap logistics.com. So that being said, I don't know we both have some interesting ones here. Pete, I don't know. Why don't you just go first on yours. Okay,
Pete Mento 17:01
so we were talking before the show started about movies, I went and saw the latest Marvel movie, which I didn't really care for. It was okay. And as a Marvel movie guy, I expect more from Marvel movies. But my daughter asked me a fun question. She said, If you could be a character in any movie, and get to live that movie, what would it be? And I had a lot of fun with this. And I actually I, you there were some obvious choices. But I thought that'd be a fun question to ask you, Doug. So if you could be a character in any movie, or any movie series or anything like that, what character in what movie would you want to be? But
Doug Draper 17:48
yeah, it is a great one. I saw that. I'm like that. That's one you do at an icebreaker. When you're with friends, you kind of know. And you kind of don't know. And it's a dinner party. And what can we do other than been Pictionary type of thing. So I'm gonna answer it in three, three ways based on you know, the evolution. So right out of college, the whole nine yards, it would be kind of a initially I was gonna say Fast and the Furious movie, because you don't have any ties. You're just out there having fun, but then I switched it to hot dog and movie if your
Pete Mento 18:21
friends and I were just talking about that a couple of weeks ago. Yeah, absolutely. With a Gene Simmons his wife at it. Yeah. Yeah, absolutely. Yeah, you're
Doug Draper 18:31
right. So hot dogs in the movie in the early phase of my life, the middle phase. This is gonna sound pretty cliche, but this is what these movies are. Probably some variety of rom coms. I'm not going to say exactly which one but that just kind of encompasses my, my life. And I guess I'm just thinking of this. Hugh, who was the who's the British actor Hugh Grant. Yeah, who grant There you go, kind of quirky kind of has a shit together kind of doesn't. So maybe it'd be some rom coms with the Hugh Grant to the third one. I was talking to my brother this morning. And I asked the question, because I was giving him an update on the show. And he said without question, and I said, That is exactly right, because I couldn't think of one Guardians of the Galaxy. And I think, because it looks like it's a lot of fun. Nobody ever gets hurt. And they got all this cool technology and fun little sidekicks, like Gru and all these other people. So I think in this stage of my life, it would be guardians of the galaxy. So what about you?
Pete Mento 19:31
That's a great one. I thought for sure you were gonna give me like Maverick or Top Gun.
Doug Draper 19:40
If I did that would have been in the first step but I'll go with hot dog, the movie, a variety of rom coms, and then Guardian, the galaxy.
Pete Mento 19:47
Okay, so mine, the first one that came to mind was Animal House because I've always kind of lived my life like bluedot but that was honestly there'll be none They knew they're like that is that movie could loosely be based on a character. That's me. So, nope. So that one got thrown out the window. And then there were all the superhero movies but but really you're gonna laugh, but because it's so not me. I would love to be the double of seven movie. Like I wouldn't, because I am not sophisticated. I am not suave. I'm not understated. I could never be a spy dog because I have such a big mouth. So, you know, the idea of me being like some, some very slender, understated, gentlemanly British man, who, who just, you know, uses this slide technology to do things for the crown. I think that would be a pretty cool character to play. Because God knows I could never be that understated and cool. Yeah, but yeah,
Doug Draper 20:52
yeah. I love it. bull in a china shop. And you would just somehow this scenario be so outlandish that it would work out for you. And it would work out for His Majesty's Secret Service, it would just work out even though it would befuddled through. I love it.
Pete Mento 21:08
You're the Mr. Bean. Did Mr. Bean double? Oh seven. Davies. Well, yeah, that's more like me. So to be the non, to be the non satirical version, I think would be pretty incredible. Love it. Love it. What do you got for stuck? Oh, yeah, this?
Doug Draper 21:26
Yeah, for sure. And I definitely want your input on it. But over the weekend, I think technically it gets read or released today. But Warren Buffett's shareholder letter. Right. I did some research and I saw one. Obviously, for all Berkshire Hathaway is, as you know, everybody, it's kind of a bellwether of investing. And everybody wants to hear what Warren Buffett has to say. Two things. Number one, the guy is 92 years old. I didn't know that. I knew he was old. He was in his 90s. That's any. You still out there hand in it? Yeah. So 92. And I think the letter has been going on since 1977. But I saw somewhere else that said it's on its 60th year. So maybe that was an abridged version before but you can go back and look at what he what he had said all the way back to 1977. So here's the highlights. There were many highlights. But here's three I wanted to point out number one, there's an underlying underlying theme that Berkshire Hathaway is doing their part as a good corporate citizen, he made a reference to $32 billion in taxes that his organization has paid in the last 10 years. And that a lot of the shareholders and folks that are at senior levels within all of his organizations, a lot of them have made outward commitments to donate their wealth for the betterment of society. So those are two things that that he had made mention of. So positioning, Berkshire Hathaway is being good corporate citizens. The other one is he called out a specific customer. He does that regularly. But Geico, was one that was brought up and in the gecko, so to speak, so it got pretty in depth. And that's not my scene. But basically, they've been losing a lot of money to the tune of hundreds of millions of dollars. And the gist of it from what I understood Pete, and you, and I definitely want your input on this. One is that they're going to stop fighting for less profitable business by just jamming commercials on TV time and time again. And they need to adjust to the severity of claims. You know, a claim nowadays is not X dollars, it's y dollars and is substantially higher, I think it was like 14% more expensive. So guy goes got some challenges, but he's not eject thing. And this one is probably a common theme. I did not go back and look at his letter from 1977 or 78, or whatever. But he said that the secret sauce, he may not have used that exact term, but long term investing strategy is what's going to bring you long term wealth. So the Bitcoins of the world, the Robin Hood, the meme stocks, everything that's kind of trendy and in pops and draws the attention of maybe some younger investors. His overall take is long term investing strategy. And the term he actually use Pete and I'll leave you with this is the weeds will wither away as the flowers bloom. So I'm sure that that theme has been scripted in many, many of his shareholder letters. But those were three things that caught my attention when I looked at this morning. So Pete, I know you've seen it or heard of it. So for this iteration, what's your thoughts on those take and anything else you want to add?
Pete Mento 24:45
I will. I'll start off with the whole GEICO thing in cars. So I remember the value of my very first car. I bought the husk of that for about $300 And I put in like another $500 of parts. And the rest was sweat equity. And I had insurance on it. And when it died, when I hit a telephone pole with it an ice storm, and they totaled it, I think I got a check for about 400 ollars. You know, and I just saw on the Twitter today, someone's got a Jeep out there like, what are these big new Jeep Wagoneer, whatever they are for like $120,000 is insuring cars today is intensely expensive. Because the cars are so expensive, you have so much more to lose. Drivers are not getting any more. Is the driving experience any safer. So as a human being any less likely to be dangerous on the road? Absolutely not, the likelihood of people being more likely to damage that very expensive ride is higher. So the thing that we're insuring, is getting more and more expensive. The reason for it getting busted up is more and more likely to be distracted and to mess something up. So I don't know that car insurance is necessarily a business that I would want to I would want to get involved in just doing the math in my head here. Right. I don't know if that's the so I can see your Mr. Buffett has his concerns. You know, that's the biggest one, you know,
Doug Draper 26:29
yeah. Good point. And he has a really excellent point.
Pete Mento 26:33
And for a while now I've been saying that all that NF T's in Bitcoin is all a get rich quick scheme, it's all in all get rich quick schemes have one thing in common, the person who gets in the earliest, and gets out on top gets rich quick. Everybody else's sit, you know, is left sitting there with a with a pocket full of magic beans. So what he's saying is correct. There is money to be made. There's always money to be made with this stuff, and money to be made on the ancillary lessons that we've learned, as I've said over and over and over again, particularly with with with the with the currency, the Bitcoins of the world. So much has to be learned from the technology that's associated with this, so much has to be learned in the use and the value, the value proposition of it, where there is a lot of technology and value. Where I don't quite understand the validity from an investment standpoint, it's why I ought to buy kini coin, or global trade this week coin. in NF T's, I'll just screen sky shot.
So yeah, the weeds will wither and the flowers will appear. It's a it's kind of a dodgy metaphor, but by things that make sense. Why things that are going to have a long term use and stick to them, because those long term investments will matter. So I joke all the time I'll be driving around with with me and we'll say, Well, that sounds like the kind of business at Berkshire Hathaway with buy. And then I find out, they own it.
Doug Draper 28:18
Nice. All right. Well, this is the fourth leg of the epic show. So this is the anchor, you're the anchor, man. So you got to bring it home.
Pete Mento 28:25
Oh, no, no, no, no, I opened. So you have the next one. And then I'm last.
Doug Draper 28:33
Well, we just did that. Topic was was BP my second one was Warren Buffett. So you are but
Pete Mento 28:40
you wouldn't do halftime?
Doug Draper 28:43
Oh shit. Oh, see? This is becoming
Pete Mento 28:50
epic. See this epic in your epic failure. That's exactly what it was meant to halftime.
Doug Draper 28:57
I better sit up straight. So this is my halftime we'll keep it short and sweet. So, as this, I'm gonna brush over this one super fast and we're gonna get to the question. So as you as everybody may have known Dilbert is no longer a comic strip that is published across the country. I'm sure there's a zero papers that are now carrying it. So my question to you is, you got to go back a long way you got to pull out when you used to get the Sunday paper, but what are some of your favorite comic strips?
Pete Mento 29:23
Well, mine are pretty, pretty easy, man. So I was a big fan of Calvin and Hobbes. Because it was you know, he's just, he's like a modern Dennis the Menace. So I dug him very much. I loved Garfield. When I was a kid. So younger, younger Pete loved Garfield. A lot. Absolutely love blue County. If you remember Bloom County, do you remember being funny? Yep. Yeah, yeah. But Pete in his 30s fell in love with a comic that was called get fuzzy. And get fuzzy was about a guy named Darby who owns sharpei and assign his cat, the Siamese cat was an absolute dick. And he Sharpay was really nice. And Darby played rugby. Derby went to Colby College. He really did play rugby for a rugby team in Boston called the Irish Wolfhounds. So it was a real guy, the real person, and Pete Mitchell really played rugby against him. But it was a nationally syndicated nationally kid comic comic. And he was it was very funny. So he carried around his Siamese cat in a in a BabyBjorn. And his cat was just a jerk is in shark and the sharp pay was just sort of this time Nice. Game satchel was really nice dog. But Darby could not get his life together with ladies or anything else because his pets were just jackasses. And all he did was like play rugby, drink beer, and try to have a real life. And it was like, you know, every guy I knew, like every guy I knew. But getting fuzzy was excellent. Yeah. And now I also like non sequitur was also another another one that I really enjoyed. But how about you, Doug, what are your favorites?
Doug Draper 31:12
Well, it's funny, because two of them are the ones that you've already said. So Calvin, and Hobbes was great stuff. They had that epic, like if anybody says Calvin and Hobbes, you think of him coming down the roller coaster where they're both leaning back, like, life is hitting them at full speed. So I liked that one. And I love Garfield. Because he's the OG of just could give to bleeps right? I mean, he could give to you know what I wish we could just drop drop F bombs on this thing. But he was the, the original gangster on taking that mentality on life and just saying, Here's what it is. And I didn't quite get it whenever you read it now, but in hindsight, amazing perspective. So I would say Garfield, number one, Calvin and Hobbes number two, dogfighting stick
Pete Mento 31:59
a second my favorite Calvin and Hobbes ever. Actually, I go to Comic Cons, because I'm cool. I bought a very large reproduction of it, and I got it autographed. So I have an autographed by by the original artist. It's the one where the dad comes home. And he the card comes into the parking lot. And Calvin has made the snowman to make it look like the car has run into one of the snowmen and the head has fallen off my bike, I love that one so much. Because it is it is the exact kind of horrible thing that I would love to have done. If I would have thought it up when I was his age, like this horror scene of a snowman being run over. I absolutely loved it. So it's my favorite. Alright, so we've had enough time now between the beginnings of the US Chinese trade war and where we are now that it has been blessed, if you will, by both economists and political scientists, both where they feel that they can study it, there have been some pretty big studies that have come out over the course of the past two weeks, on both sides of the ocean, both in China and the United States, some academic someone by the governments, in some that have been done by third parties that can allow us to see what the impacts of this trade war have related to. So just going over that, here's what we can tell you from a nonpartisan, mostly business focused impact, the United States seems to have taken the opportunity of this trade war to bring back some business. So they're looking at nearshoring, mostly in the face of taking some production back to Mexico, and moving a lot of business out of China into different parts of the world to strengthen and make a more resilient supply chain. Now, when I say a lot of business, it's all relative. We still got a tremendous amount of business in China, a tremendous amount of production in China. And a lot of that business has moved to parts of the world in Asia, and places like Vietnam, Cambodia, Taiwan, Indonesia, Malaysia, parts of Asia that are still relatively under the sphere of influence of China. And a lot of the raw material is still coming from China. So there's still money, you're still influenced. There's still parts of the logistic stream that go back to China and other industry. Part of the analysis is that the transportation and supply chain is still controlled by Chinese ships, Chinese businesses and Chinese banks. So although production is still being controlled by Chinese influence, it would not move to the United States without some sort of hand of the Chinese Moving there. Chinese business is now under more scrutiny than ever before, by American business. And it is American executives who are beginning to see China as a threat to stable American business. On the other side of this analysis, are Chinese businesses who are beginning to see America scrutinize the use of, of these Chinese businesses and are wary of what the future holds. So more and more Chinese businesses who are concerned about the future of sort of this bilateral and the concept of decoupling between these two, so the tensions are very real. And the concern is very real. And there are more and more Chinese companies who are very, very concerned about what the future holds. So I guess the bottom line here, Doug, is that more Chinese businesses see doom and gloom in the future, and more American businesses are taking steps to decouple themselves from China than ever before. But in reality, most of the ways that they're decoupling still have a tremendous amount of connection to these Chinese companies. So I think that's going to be the next step is smarter American companies realizing that the moves that they're making to not be associated with Chinese companies still have an association, Chinese companies, banks, and control by Chinese CCP.
Doug Draper 36:24
Interesting. So two things came to mind when you shot this one over. Number one is that America is one selling channel and one consumer in the world, right, this show is called global trade this week. So in some instances that we've seen is China's like, okay, us, you're not interested in buying it the tariffs, you're not, you're slowing down, we got a lot of other people in the world that we can sell to. Right. So I think that that has created a little bit of stability, all the things you spoke about with the more little uncertain in the future, I think is valid. But I think if you looked at who was less impacted, my personal belief is China because they're their buyer and their customers just not the United States of America. It's the global world. And so they'll just divert other things and sell the same items to other parts of the world. The other piece is that there's one thing that got in the middle of all of these trade barriers and tariffs, it was called COVID, which kind of thrill loop on any type of statistical analysis that could probably provide good perspective. So I think that couple more years out, we'll be able to see what it looks like. But the ebbs and flows of the world, and the economy, as we know is like a gigantic ocean. And so there's going to be factors that will impact post COVID, which may be able to make the pre COVID decisions, a little more difficult to really say so COVID Khan, I think messed up the whole math, so to speak. And the analysis of it to say, who won who lost wasn't good wasn't bad. But I think we'll be able to check that out in a couple more years, to kind of see where we stand. So those are the two things that popped in my mind for this one.
Pete Mento 38:12
Yeah, I think people are very quick to try to come to a conclusion. We're nowhere near this thing being done.
Doug Draper 38:18
Yeah. I think you nailed it right there. People need something right here and right now, because you can get it right here and right now on this phone. So you know what, Pete? I think that's it epic will let our listeners decide that. If it was epic, if it's all lowercase epic, if there's an uppercase E and the rest lowercase, but one thing Pete Is it will be in Times New Roman font. We'll see that. So give us your thoughts on the show. We really appreciate it can't thank cap logistics enough, as I mentioned to give us the soapbox to come on. And I think that's it, Pete so we will wrap it up. And thanks for another great edition of global trade this week. See you later. Thanks,
Pete Mento 39:01
everybody. See you next week.